Wednesday, January 11, 2012

Goals for 2012

As I start my first full year of investing, I thought it would be a good idea to set some goals. These goals will provide me with a way of monitoring my progress during the year and assessing the final results at the end of the year. I am setting fairly conservative goals that I expect to meet if I can continue to invest and save as I have done in the recent past. My investing goals for 2012 are:

Goal 1: Dividend income of $1300: This goal is based primarily on the assumptions underlying the projection of annual dividend income on my Strategy page. My dividend income based on 2011 rates will be insufficient to achieve this goal, so I will need to get there by a combination of dividend growth, dividend reinvestment, and investment of new funds.

Goal 2: Savings of $12000: This goal is based on a rough estimate of my savings rate over the past few years. This will be the first year that I keep track of exactly how much I save each month. My goal works out to saving an average of $1000 per month. These savings will be considered new funds for investment because I already have enough money reserved for emergencies.

I am reasonably confident that I can achieve these goals. I am not setting a goal for my portfolio's total return because the market is too unpredictable. Indeed, market unpredictability is one of the reasons why I am a dividend-growth investor: I will receive a steady and rising stream of dividends regardless of whether the market goes up or down. However, I will still monitor my portfolio's value and see how it compares with benchmark indices such as the S&P 500.

I look forward to reporting the progress I make toward my goals throughout the year. I hope everyone has a great investing experience in 2012.

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